A recent news article discussed the issues that California same-sex couples may face when it comes to making sure that they and their loved ones are fully protected financially. Same-sex couples can face more difficulties than heterosexual married couples when it comes to filing taxes, collecting insurance, contributing to retirement plans, collecting social security benefits and even going through probate, so LGBT couples need to take additional care when it comes to estate planning.
Many of the tax and financial benefits that heterosexual married couples enjoy are just not available to same-sex couples, so retirement and estate plans require some creativity for same-sex partners. For example, married heterosexual couples get Social Security benefits that are unavailable to same-sex couples, while LGBT persons cannot contribute to an IRA for a non-working partner.
Likewise, while married straight couples can transfer assets freely between each other without incurring federal estate taxes, married same-sex couples are still subject to the $5.12 million lifetime estate and gift tax exemption. To make things worse, the exemption could be decreased to just $1 million at the start of 2013 if Congress does not act.
These are just a few of the pressing issues that underscore the need for same-sex couples and families to make sure they have their wills, beneficiary designations and advance medical directives in good order. Because estate and tax laws fail to give same-sex couples the benefits available to heterosexual couples, they must take extra care to ensure that their property is properly distributed and that their loved ones are taken care of as planned.
Source: The St. Louis American, "LGBT couples often face additional financial hurdles," Jason Alderman, Oct. 18, 2012